World Economy

New President Vows to Liberalize Argentine Economy

New President Vows to Liberalize Argentine EconomyNew President Vows to Liberalize Argentine Economy

Conservative challenger Mauricio Macri turned Argentine politics on its head on Sunday, kicking the ruling Peronist movement out of power with a promise to liberalize the ailing economy and end a culture of divisive politics.

Macri, the son of an Italian-born construction magnate, won the election by tapping into frustration over anemic growth, high inflation and corruption, and will become only the third non-Peronist leader since the end of military rule in 1983, Yahoo reported.

His victory signals the effective end of a dozen years of so-called “Kirchnerism” in Argentina, which featured heavy taxes on agricultural exports. President Cristina Fernandez de Kirchner, who is term-limited, succeeded her late husband, Nestor Kirchner, who served one term, from 2003 to 2007. His wife was elected in 2007 and re-elected in 2011. Nestor Kirchner died in 2010.

Under Kirchnerism, the state has exercised greater control over the economy, imposing heavy taxes on agricultural exports. Macri has said he wants to reduce the state’s role in the economy. He has promised more pro-business policies, as well as a realignment of Argentina’s foreign policy.

He also wants to scrap currency controls and make it much easier for Argentines to change their local pesos into US dollars—that would likely require the country’s central bank to increase its currency reserves.

To do so, analysts say Macri would have to strike a deal with US hedge funds that Fernandez has called “vulture funds”.

Argentine sovereign debt rose on Monday on news of his election, with the 2033 dollar discount bond hitting its highest level since April 2007. While Argentina’s stock market was not yet open for business, the Frankfurt-listed American Depository Receipt of Argentina’s Grupo Financiero Galicia jumped 6.28%.